Ericsson Profit Declines, Plans to Cut 5,000 Jobs

From PC World: Swedish operator Ericsson saw declining profits for its fourth quarter and will lay off 5,000 employees in a continuing effort to cut costs, the company said Wednesday.

The company plans to achieve annual savings of 10 billion Swedish kronor (US$1.2 billion) from the second half of next year through the job cuts.

Around 1,000 people will be laid off in the Stockholm area. Ericsson will also reduce the number of consultants and other temporary staff, it said in a statement.

Ericsson has to be prepared for tougher times and do everything it can to defend its current market position, according to CEO Carl-Henric Svanberg. Ericsson warned that it's difficult to predict to what extent consumer spending on telecom services will be affected in the future.

Ericsson said its core infrastructure business has hardly been hit by the recession so far, but the company did see declining profits. Sales for 2008, however, were up compared to a year prior.

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